President Donald Trump has repeatedly boasted that revenue from his tariffs will be so substantial that it could fund $2,000 rebate checks for Americans and even eliminate income tax altogether, though even under the rosiest scenarios, economists are saying Trump’s promises are “impossible.”
“We are talking complete fantasy here,” said Daniel Shaviro, a professor at NYU Law, who called Trump’s claim that tariff revenue could replace income taxes “not feasible at all,” speaking with Newsweek in its report Saturday. “Tariffs probably can't supply even as much as 10 percent of the revenues derived from U.S. individual income tax revenues alone."
On Tuesday, Trump claimed that revenue from his tariffs would be “so enormous that you’re not going to have income tax to pay,” having repeated a similar claim last month. According to the Treasury Department, around $195 billion in tariff revenue was collected during fiscal year 2025, and the Trump administration has projected annual tariff revenues reaching “towards a trillion-dollar number” in the future.
Yet, even with these projections, tariff revenue still didn’t come close to plugging the hole that would be created by eliminating federal income tax, which accounts for more than half of all government revenue.
“If you pushed tariffs to their revenue-maximizing limit – which would be very unwise for a host of considerations – they would bring in less than $400 billion a year, a small fraction (about one sixth) of what the income tax raises,” said economist Kimberly Clausing, calling Trump’s claims a “mathematical impossibility,” speaking with Newsweek.
Trump’s tariff policy is at a crossroads this month with the Supreme Court potentially ruling it unlawful as soon as this month. With justices having already heard arguments, and the majority of them responding to the Trump administration’s arguments for the tariffs with skepticism, the president’s key foreign policy could be flipped on its head in a matter of weeks.
“[It is] literally impossible for tariffs to fully replace income taxes,” said Alan Wolff, a senior fellow at the Peterson Institute for International Economics, speaking with Newsweek.